Grand Rapids, MI -- (SBWIRE) -- 04/14/2011 -- Financial advisor Dennis Tubbergen has been sharing excerpts from a book he is writing regarding where he believes the U.S. economy and markets are headed. In the most recent excerpt, Tubbergen explained his take on the real estate bubble and how the Federal Funds rate plays a part in the housing market.

“As a result of the housing bubble bursting, the Federal Reserve once again began to reduce interest rates in an attempt to ‘fuel the economy,’” claims Tubbergen. “The problem is that all these efforts by the Federal Reserve are attempts to fuel the economy by adding debt, borrowing against future production to get economic results today.”

Tubbergen goes on to explain the Federal Funds rate is still at .25% in March of 2011, with no sign of increasing even though there is evidence that the current Federal Reserve policies are leading to a speculative bubble in some commodities, especially food and energy prices around the world.

“The problem with our economy is debt,” Tubbergen argues. “I believe that any economic system can handle only so much debt and we may have now reached that level. Trying to solve a debt problem by adding more debt only hides the symptoms for awhile; it does nothing to solve the underlying problem.”

Tubbergen claims attempting to solve a debt problem by adding debt is like attempting to help a drug addict by giving them drugs: they feel better for a short time, but then the real problem re-emerges.

“Here’s a prediction and opinion,” concludes Tubbergen. “I’m still bearish on the economy and the markets long term. Once the Federal Reserve stops buying government debt and quantitative easing number two ends or gets near an end, equity markets will likely react negatively given that policymakers will be facing the task of financing the monster deficit honestly rather than simply printing money to do so.”

Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in the USA Wealth Management Building in downtown Grand Rapids, Michigan. Tubbergen is CEO of USA Wealth Management, LLC and has an online blog that can be read at www.dennistubbergen.com. His weekly talk show The Everything Financial Radio Show is simulcast on two Michigan metro stations and also airs to over 600,000 financial advisors, with recent podcasts available at www.everythingfinancialradio.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.